Sir,
Please refer some case laws related to income tax on unexplained credits, such as a party has credited Rs.9,00,000/- to his capital a/c. This amount has been received by various Demand Drafts through his brother which were credited in capital a/c of the assessee on a/c of deposit of his brother. The assessee's brother has given an affidavit that the proceeds deposited in the a/c of the assessee is on a/c of sale of potatoes throgh one Arahatiya. The sale has been made to Arahatiya who has deposited the drafts to the party's brother a/c. But the ITO is claiming after confirming from the bank that the originator of the Bank Draft is not the same person the assessee mentioned (Arahatiya). ITO by treating this deposits as unexplained credits added the same to the income of the assessee as cash credits u/s 68. Penal proceedings u/s 271(1)(C) are being initiated against the assessee on this count for furnishing inaccurate particulars of income. Is the ITO's order is justified.
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